Posted tagged ‘Housing Supply’

This article brings to light some points to think about regarding how real estate transactions are carried out. If you’re an agent you might want to compare how you treat your clients with this presentation. For a more detailed look at this subject – please read the article below.

As analysts continue to watch market indicators for trends that might hamper the borrowing experience, a recent poll shows that borrowers themselves are more focused on customer service problems.

The poll, conducted by real estate search engine Qazzoo.com, asked new homebuyers which aspect of the experience they found the most frustrating. Available answers covered the entire purchase timeline, starting with reaching out to a real estate agent and concluding with the loan application process.

According to the company, the most common source of aggravation cited by respondents was “lack of timely follow up by the real estate agent,” an answer that garnered 42 percent of responses.

The next most popular answer was also service-related: “being shown homes that don’t meet your needs” (36 percent).

The other three options, all market-related, came up in fewer responses, with 11 percent of consumers complaining about a “lack of real estate inventory,” 5 percent citing problems “understanding the mortgage options available,” and 4 percent pointing to “difficulty in qualifying for a mortgage.”

Two percent of consumers responded with issues falling into the “other” category.

Michael Urbanski, CEO of Qazzoo.com, said the idea behind the survey choices was to “illustrate what can and cannot be controlled by the real estate professional.” For example, while interest rates and loan programs are beyond an agent’s control, timely follow up is not.

This is a pretty complete overlook of the inventory shortage. The one major factor that was not touched on by this article is the lenders, for a lot of different reasons, are not putting many of their foreclosed homes on the market as fast as they used to and therefore there are less of these homes for sale. For a more detailed look at this subject – please read the article below.

Inventories of homes for sale have been slow to bounce back since the 2007–09 recession, despite steady price appreciation since January 2012.

Normally, higher prices reflect robust sales. But lately, prices have been rising even though sales remain stuck at relatively low levels. The National Association of Realtors reports that an annualized 4.5 million homes were sold in June 2013, roughly the same as at the end of the 1990s.

Many prospective buyers attribute the low sales volume to a lack of inventory on the market. So why are there so few homes for sale? There are lots of reasons why.

William Hedberg, a research associate, and John Krainer, a senior economist, both with the Federal Reserve Bank of San Francisco, examine some of the factors affecting this “more complicated than normal” situation in a recent paper. Here are their key findings:

Many homeowners are still underwater. Many properties are still worth less than the value of their mortgages, which would leave sellers owing additional money at closing.

As a result, a large number of homeowners are waiting for house prices to rise, allowing them to recover lost equity. They delay putting their homes up for sale until the situation improves and they can make back enough to cover the down payment on their next purchase.

This is really good news for sellers and not so good for buyers. If you are trying to buy a home you might need to become more aggressive than in the past. For a more detailed look at this subject – please read the article below.

Despite a softening market, competition among buyers remained fairly fierce in October, Redfin reported in its Real-Time Bidding Wars release for the month.

Last month, 55.9 percent of offers written by the Seattle-based brokerage’s agents faced competition from other buyers, a decline from 58.3 percent in September. Bidding wars have been on a downward slope since peaking at 79 percent in February.

October was also the third consecutive month to see a drop in competition compared to the same month last year, Redfin said.

Even with the decline, though, competition last month was higher than expected, given the effects of the government shutdown on consumer confidence.

“While many Americans paused their home-buying and selling plans during the shutdown, overall demand in October was more robust than expected, with home tours and offers rebounding once the government reopened,” said Redfin analyst Rachel Musiker. “This unexpectedly strong demand paired with dwindling inventory likely kept competition from falling even further in October.”

Out of the 22 markets reporting, Boston saw the biggest drop in competition, with 61.3 percent of offers facing bidding wars—down from 70.1 percent in September. San Diego, meanwhile, experienced the biggest increase in bidding wars, with 63.0 percent of offers competing against multiple bids compared to 56.1 percent the month prior.

It seems that this is really a seller’s market except for the stringent requirement to qualify for a mortgage. Most mortgage brokers think that the lenders are taking advantage for this increase in sales to demand that buyers are “Over Qualified” before they will grant a mortgage. For a more detailed look at this subject – please read the article below.

October saw existing-home sales decline for the second straight month as low inventory propped up prices, the National Association of Realtors (NAR) reported Wednesday.

Total existing-home sales—completed transactions of single-family homes, townhomes, condominiums, and co-ops—fell 3.2 percent from September to October, coming out to a seasonally adjusted annual rate of 5.12 million. Compared to last year, sales were still up 6.0 percent, marking the 28th consecutive month of year-over-year improvement.

“The erosion in buying power is dampening home sales,” said NAR chief economist Lawrence Yun. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”

The national median existing-home price for all housing types was $199,500, up 12.8 percent annually.

Part of the rise in median price came from a smaller share of discounted distressed sales: Foreclosures and short sales together made up 14 percent of October’s sales (9 percent foreclosures and 5 percent short sales) compared to 25 percent last year.

At the same time, inventory remains a challenge. The total number of existing homes available for sale at the end of October was 2.13 million, down 1.8 percent year-over-year. At the current sales pace, inventory levels come to a 5.0-month supply, NAR reported.

This is probably the buyer’s reaction to home price increases, lack of inventory and the rise in mortgage rates overshadowing the normal reduction in sales during the winter months. For a more detailed look at this subject – please read the article below.

Contrary to what some are reporting, Realtor.com’s National Housing Trend Report for October indicates the homebuying season hasn’t come to a close just yet.

“Instead of the usual seasonal slowdown, October data show the 2013 fall market moving at a fast pace,” said Errol Samuelson, president of Realtor.com.

“Inventory has returned to last year’s levels, but prices continue to strengthen and homes are moving significantly faster compared to this time last year,” Samuelson continued.

Realtor.com’s data shows the median list price in October was relatively untouched by the yearly seasonal drag falling just 0.25 percent month-over-month to $199,000—7.57 percent above its year-ago level.

Eighty-five percent of the 146 markets covered in the report showed yearly improvements in median list price, and only 19 reported annual declines.

Compared to September, national inventory was down to 1.9 million, a decline of 0.71 percent from September and 1.51 percent from October 2012.

While the country continues to struggle with inventory problems, local trends indicate growth in supply.

According to Realtor.com, the number of markets where inventories were down by 5 percent or more annually dropped to 65 in October, continuing a trend that started in the summer. Meanwhile, inventory grew in 49 markets, and the number of areas with inventories up by at least 5 percent compared to last year rose to 30.

This is great news for sellers and not so great for buyers. The relative small amount of homes for sale and low mortgage rates are the leading cause of this trend. For a more detailed look at this subject – please read the article below.

Nationwide, homes listed for sale on Zillow were selling at a rapid clip, to the tune of a month faster in September than a year ago, according to a new analysis. Zillow measured homes sold on the real estate marketplace, and as a whole homes in September spent a median of 86 days on Zillow, down 30 days from 116 days in September 2012.

Among the 30 largest metro markets covered by Zillow in September, homes moved the fastest and spent the fewest days listed on the site in the Bay Area (48 days); Sacramento, California (59 days); and Dallas, Texas (60 days). Homes sold faster this September compared to last September in 30 of the largest metros. Those metros include Las Vegas (44 days faster), Sacramento (43 days faster), and San Antonio (37 days faster).

Zillow calculated the median number of days listings spent on Zillow, at the national, metro, and county levels, dating to January 2010. In order to correct for homes that are listed, then removed and re-posted with new prices, Zillow considered multiple listings within 40 days at the same address as one listing. Since the beginning of 2010, homes nationwide have spent a median of 119 days on Zillow before being sold or taken off the market.

“The declining inventory of for-sale homes over the past year naturally creates pressure for buyers to more quickly snap up the inventory that is on the market. This demand has been fueled by huge resets in home prices since market peak, historically low mortgage rates and a slowly improving broader economic climate,” said Dr. Stan Humphries, Zillow chief economist.

A lot of inventory is being held of the housing market for numerous reasons. Some are being held off because they need repairing and a lot of them are just sandbagging them to not have to show a huge loss at this time when they sell. For a more detailed look at this subject – please read the article below.

While headlines continue to portray a housing market with rising prices and tight inventory, the Census Bureau released its Housing Vacancies and Homeownership report this week.

Government data reveal a dark cloud looming behind the bright headlines. Vacancies remain high, and according to Trulia, more than three-fourths of the nation’s largest markets are dealing with bigger shares of vacant homes than they saw prior to the latest housing bubble.

With inventory levels retracting even further — falling 3.3 percent year-over-year in the third quarter, according to Realtor.com — it may seem counterintuitive that vacancies would be high. However, according to the Census Bureau, about 53.5 percent of vacant homes are currently being held off the market.

The vacancy rate today is 10.2 percent, according to Census data, down from a peak of 11 percent in 2010 but stubbornly higher than the pre-bubble 8.8 percent.

Furthermore, the high vacancy rate is widespread. Trulia pointed out in a blog post Wednesday that vacancies exceed pre-bubble levels in 86 of the largest 100 metros in the country.

Some homes are being held off the market temporarily for repairs before being listed for sale or rent. However, Trulia warns that when these homes hit the market, demand may not rise to match the new inventory.

“Household formation was alarmingly slow,” said Trulia’s chief economist, Jed Kolko in a statement Tuesday responding to the newly released Census data. Household formation totaled about 380,000 year-to-date in the third quarter, notably lower than the historical annual norm of about 1.1 million.

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